XPeng Inc. XPEV shares were trading solidly higher Thursday after the Chinese electric vehicle manufacturer announced an agreement to build an additional manufacturing plant.
What Happened: XPeng said it has entered into a cooperation agreement with the city of Wuhan in China's Hubei province to build an EV manufacturing base in the city, the company said in a statement.
The proposed plant would have an annual capacity of 100,000 units.
XPeng plans to commence construction of the plant with support from the local government. The plant is planned over an area of over 733,000 square meters and will feature manufacturing and powertrain plants, as well as R&D facilities, the company said.
Wuhan is one of the six major automobile manufacturing bases in China, with a well-developed auto supply chain and ancillary facilities, XPeng said.
It is also well connected via high-speed rail, expressway and water transportation.
"Smart EVs are booming in popularity in China. We have a long-term strategic roadmap to embrace the sector's transformation. Expanding our capacity in key hubs like Wuhan plays a critical role," said He Xiaopeng, chairman and CEO of XPeng.
Related Link: Electric Vehicle Showdown: Tesla Vs. Nio Vs. XPeng Vs. Li Auto — How Q1 Deliveries Stacked Up
Why It's Important: China witnessed record new energy vehicle sales of over 1.3 million units in 2020.
The new plant would augment XPeng's production to meet surging demand.
XPeng has a manufacturing plant in Zhaoqing, Guangdong Province.
Late last year, the company announced plans to build a second manufacturing plant in Guangzhou with 4-billion-yuan ($610.72 million) in funding from a state-owned investment company.
The manufacturing capacity expansion will come in handy for XPeng, which is beefing up its product portfolio and advancing the technological capabilities of its vehicles.
XPEV Price Action: At last check, XPeng shares were rallying 4.4% to $35.57. Related Link: Why This Nio, Xpeng Analyst Is Bullish After Q1 EV Delivery Updates
Photo courtesy of XPeng.
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